Deadbeat Illinois: Universities get fraction of what they’re due

SPRINGFIELD — Although delayed payments from the state are to be expected these days, university officials say the predictability doesn’t make it any easier.

INSIDE: By the numbers

By Lauren Leone-Cross

Journal Standard

By Lauren Leone-Cross

Posted May. 20, 2013 at 12:01 AM
Updated May 20, 2013 at 7:11 PM

By Lauren Leone-Cross

Posted May 20, 2013 at 12:01 AM
Updated May 20, 2013 at 7:11 PM

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SPRINGFIELD — Although delayed payments from the state are to be expected these days, university officials say the predictability doesn’t make it any easier.

Nearly 11 months into this fiscal year, which ends June 30, Illinois’ nine public universities have received about $673.7 million — or about 65 percent — of the $1.2 billion appropriated, said Mike Dropka, spokesman for the comptroller’s office.

A surge in tax collections coming into the state for April has allowed Illinois to make substantial payments to a number of vendors, including universities. Without the increase, the plan was to only pay about 55 percent of total appropriations by this time.

The increase in revenue puts the state on track to write a full check to universities by December — six months into a new fiscal year — a trend that has forced the schools to cut into their reserves and learn how to do more with less.

Just recently, Northeastern Illinois University eliminated low-enrolling courses it otherwise would have kept and cut down on utility costs, said Mark Wilcockson, vice president for finance and administration at the school in Chicago.

Those types of cost-saving measures have become the norm, he said.

Also, the university had an unusually large number of people retire last June to avoid pending changes to retirement benefits, Wilcockson said. That helped ease the impact of the late payments.

While leaving some of those positions vacant, officials also opted to replace the often higher-paid retirees with lower-paid employees who are earlier on in their careers, he said.

Other universities have postponed capital improvements, limited travel expenses and implemented multi-year salary or hiring freezes to deal with the delay in payments. There have been furlough days as well.

“We have not taken any furlough days yet … I say yet, but I do not know what the future holds,” said Matt Bierman, budget director for Western Illinois University in Macomb.

To help offset delayed payments and budget reductions, Western officials plan to propose a 4 percent to 5 percent tuition increase at the June 7 board of trustees meeting, he said, adding that the increase will be proposed despite fear of increased competition from bordering states.

“For year one, it is less expensive (for Illinoisans) to go to Missouri as it is to pay in-state tuition in Illinois at some schools,” Bierman said. “So our competition is not just the state of Illinois. It adds another competitive threat, especially by the good students who are being recruited.”

Relying on a tuition increase is a reality many universities have faced in the past couple of years to help cover payroll costs and other expenses, he said.

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The University of Illinois system, which includes the Springfield, Urbana-Champaign and Chicago campuses, increased tuition by 4.8 percent in 2012, and just last week, the Southern Illinois University board of trustees approved 5 percent and 3 percent tuition increases for its Edwardsville and Carbondale campuses.

Universities also are worried about what lawmakers will approve for spending in the next state budget. Gov. Pat Quinn proposed a $35.6 billion spending plan, but the Illinois House is considering an overall budget that would spend less. Details have not yet been finalized.

“The cuts keep coming,” Bierman said.

Just eight years ago, the state provided more than half — 56 percent — of WIU’s total budget. Now, it’s 42 percent and shrinking, he said.

Payment delays also will be more difficult to manage once a proposed plan to shift the cost of downstate teacher pensions from the state and onto universities and colleges is put in place, according to Alan Phillips, deputy director at the Illinois Board of Higher Education.

“As those costs are transferred to us, it would certainly be helpful if they could pay payments more quickly,” Phillips said of the state. “It’s the equivalent to another reduction because there’s no revenue to offset the increased cost for the pension. They’d have to find money out of existing revenue.”

Greg Alt, comptroller at Illinois State University in Normal, said the silver lining is the state has created somewhat of a schedule now, paying about 5 percent of the backlog down each month.

“If that changes, there’s a limit on how much our tuition and other available funds can hold out,” Alt said.

Overall, the delays have become somewhat easier to manage — at least compared to fiscal 2010, which U of I spokesman Tom Hardy describes as the “worst” in recent years, when delayed payments happened with little warning.

“In 2010, it kind of rushed up on everybody. Back then, there was some question as to whether or not universities would be able to meet payroll. There were salary freezes. Some universities took furlough days,” Hardy said. “It’s more predictable and better managed now.”